MEXICO CITY, April 26 (Reuters) - Mexico's Congress passed a bill on Thursday to punish people who finance terrorist groups like al Qaeda with up to 40 years in prison.

The bill would also make it easier for police to investigate bank records in cases of suspected terrorism.

"We have to improve the law to do with activities not just against Mexico but also against organizations that operate in other countries," Sen. Gustavo Madero told Reuters.

Mexican police have helped in investigations with U.S. authorities since the Sept. 11, 2001 attacks but have not found any significant terrorist activity in their country.

Still, many Americans worry terrorists could use Mexico to attack U.S. targets.

Experts say the 2,000-mile (3,200-km) U.S.-Mexico border, much of it passing through remote desert areas, is a potentially easy place for terrorists to slip into the United States.

The United States is building a controversial fence along parts of the border to reduce illegal immigration and stop rampant drug smuggling. It has posted National Guard troops along parts of the frontier.

In February, a Saudi wing of al Qaeda called for attacks on suppliers of oil to the United States, including Mexico.

While there has been little indication of terrorist activity in Mexico, increasingly violent drug smugglers are making parts of the country more dangerous as rival gangs battle for territory.

President Felipe Calderon has cracked down on brutal drug gangs but this has failed to stop a war between smuggling groups that has killed around 700 people so far this year.

AlertNet news is provided by